Nokia patent dispute: HTC sales may be banned in UK

Nokia has won a sales injunction which could see HTC blocked from selling its phones in the UK - including the HTC One - unless it can lodge a successful appeal by 4pm on Friday 6 December.

Giving evidence in the patent dispute with Nokia, patent manager at HTC Brad Lin told the high court that the company does not know what features its key chips will have.

He told the court that "the features of the chips selected by HTC [for its new phone] are unknown to HTC" and that he therefore did not know whether they infringe a specific patent owned by Nokia.

'Simply incredible'

But His Honour Justice Arnold called Lin's statement "simply incredible" in the context of the dispute, where Nokia has successfully asserted that the Broadcom and Qualcomm chips used in the HTC One infringed one of its patents.

"I shall assume that what Mr Lin means is that HTC does not know if the chips have the features of claim 1 of the [Nokia] Patent," HHJ Arnold said in his judgment. "The significance of that assertion, even assuming it is correct, depends on what efforts HTC has made to find this out, which neither Mr Lin nor any other witness reveals."

The successor to the HTC One, the flagship phone from the Taiwanese phone maker, could be released as soon as February next year, the court heard, though the company has not yet announced a date.

According to evidence presented to the court, the UK smartphone market has grown from $7bn (£4.4bn) in 2012 to $9bn this year, and is dominated by Apple and Samsung, which have 39% and 33% of the market respectively. Overall, Android phones make up 48% of sales, the court heard.

Direct competition

Nokia has about 6% of the market and HTC just 3%, the court was told - putting their respective revenues at $540m and $270m. HTC contended that because the phones run different mobile operating systems that the two are not in "direct competition" - which Nokia disputed. It claimed that it had lost sales of its Lumia phones since the launch of HTC's One.

The court also heard that the UK is HTC's largest market in Europe, and that the HTC One, One Mini and One Max account for 70% of its sales in the UK. From January to September HTC sold 715,000 smartphones in the UK, with revenues of £221m, an average selling price of £309.

Sales bans

Nokia is asserting the patent against HTC in a number of countries, and the consequences of further losses could be serious if they are also followed by sales bans.

LG - through Google's range of Nexus phones - Samsung and Sony are also in litigation with Nokia over alleged infringement of its patent.

Nokia said in a statement that it was "pleased that the UK high court has imposed an injunction on certain HTC products found in October to infringe a Nokia patent… Pending the appeal, HTC has undertaken not to ship any more of the infringing products into the UK, except the HTC One which it may continue to sell until the conclusion of any appeal. If HTC does not succeed on appeal, the injunction will take effect on all infringing products."

HTC has seen its revenues dwindle in the global smartphone business as it struggles against Samsung and smaller Chinese rivals, as well as Apple and Nokia. Its monthly revenues for November, reported on Tuesday, were down by 27% year-on-year to $522m (£328m).